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What is Gann Angles?

Thursday, 6 June 2013

It is called Gann Angles after the death of William Delbert
Gann who discovered it, and it is considered from one of the best theories in
the 20th –century in the stock market.

William Gann used the angles theory in his trading and
called them The Basis of My Forecasting Method, and it consists from 33 pages
as a written course which Gann wrote it in 1935 to enable him from trading in
the stock market.

So his ways and techniques in trading and the correct
results of them make a lot of questions about those techniques.

In order to calculate a Gann angle is very simple way and it
is equal to find the derivative of a single line on the chart.

Gann considers each angle a line extended into space, and it
divides the time and the price into proportionate pieces.

The 45° angle is the most important one and Gann calls it
the 1*1, because as he said that this angle represents one unit of the time and
the same of the price.

The another angles, which comes in the second place of
importance, is called 2*1 , which moves up two points in one day, and then 3*1,
4*1, and the 8*1 and 16*1 angle.

Gann Fan is the group of angles when they are drawn together
in a group, and they may be drawn descending from price tops or ascending from
price bottoms according to their description.

As with other kinds of technical analysis of stock price
movements, the Gann angle model contradicts the weakest way of the efficient
market hypothesis which states that past price movements are not used to
forecast future price movements.

In the next article I will explain more about Gann angles theory
and I hope you find useful information about this subject.